TUNG KEE GARDEN HORTICULTURE LTD v. WONG WANG TAT t/a TSUI PARK GARDEN

DCCJ 2699/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2699 OF 2005

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JUDGMENT

1.  The Plaintiff claims against the Defendant under an agreement to supply horticulture fibreglass planters for the open area at a residential development situated in Lot No. 269 in D.D. 390, Sham Tseng, New Territories also known as the Bellagio (“Bellagio”).

2.  It is the Plaintiff’s case that the fibreglass planters supplied by the Defendant was defective and the Defendant had refused to rectify the defects.  Consequently, the Plaintiff had to obtain other contractors to rectify the defects at the costs of HK$248,865.00.  The Defendant denies the Plaintiff’s claim and counterclaims for the outstanding balance of HK$50,000 and unpaid additional paint work of HK$1,850.00. 

Background

3.  The Plaintiff is and was a company incorporated in Hong Kong carrying on business as a soft landscape and rock installation contractor and a supplier of shrubs, plants, flowers and trees.  Under  contract No.C900 entered between Kumagai Gumi Co. Ltd. (“Kumagai”) and the Plaintiff, the Plaintiff was engaged as one of the contractors of Kumagai to carry out soft landscape works including the planting of shrubs, flowers and trees at the Bellagio.  In or about March 2003, the Plaintiff entered into a sub-contract with the Defendant to supply 8 rectangular, 16 circular and 2 sets of modular fibreglass planters at the price of HK$210,000 (“the contract”) for use at the Bellagio.

4.  It is the Plaintiff’s case that the contract was partly oral and partly in writing.  The Plaintiff claimed that the oral agreement was made at a meeting or meetings held at the Plaintiff’s office on or about 20 to 23 March 2003 between the Plaintiff’s Mr. Lo and Mr. Wong of the Defendant. Subsequent to the meeting(s), the Defendant delivered to the Plaintiff a quotation on 31 March 2003.  The Plaintiff further relied on the Defendant’s invoice No. 18686 as evidence of the agreement in writing.

5.  It is the Plaintiff’s case that the Plaintiff had made known to the Defendant the particular purpose for which the fibreglass planters were required, namely for growing plants at the Bellagio.  The Plaintiff further claimed that it was an express and implied condition of the contract that the said fibreglass planters would be of good workmanship and reasonably fit the particular purpose required.  The Plaintiff further claimed that it was an express and/or implied term and condition of the said contract that the Defendant would carry out the works in a proper and skilful manner using good and proper materials.  It is the Plaintiff’s case that in breach of the contract, the fibreglass planters and the 2 sets of modular planters supplied by the Defendant to the Plaintiff did not conform with the plans and specifications supplied by the Plaintiff, the Defendant failed to fulfil the contract in a proper and skilful manner using good and proper materials.  Furthermore, the planters and modulars supplied were not reasonably fit for the purpose and of poor workmanship.

6.  The particulars of defects and poor workmanship pleaded in the Plaintiff’s Statement of Claim are as follows:-

(i)	All the fibreglass and modular planters were found to be defective, have hair line cracks and the paint was peeling off; and all planters required mending and repainting;
(ii)	The steel frames of the 2 sets of modular planters were defective and were not designed to support the weight of the plants and soil, in consequence of which the 2 sets of modular planters collapsed and had to be replaced;
(iii)	Water marks and poor paint surface appeared on all the fibreglass planters; and
(iv)	The supporting frames of the fibreglass planters were exposed and became rusty; rusty water seeped out of the hairline cracks of the fibreglass planters onto the floor tiles staining the floor tiles at the residential development.

7.  The Plaintiff claimed the defects referred to the particulars were caused by:-

(i)	the metal supporting frames constructed and placed underneath the elevated platforms in module A, B and C of the modular planters were defective in that they were not designed to support the weight of the plants and soil placed on the top of elevated platforms; the metal supporting frames were of inferior quality and/or not of merchantable quality;
(ii)	the metal frames constructed inside the fibreglass planters for reinforcement purpose were of inferior quality and not of merchantable quality;
(iii)	the fibreglass used on the planters were of inferior quality or not of merchantable quality; alternatively, all fibreglass planters were not designed or constructed in such a way that they could hold the weight of the plants and soil to be placed in them.

8.  According to the evidence of the Plaintiff’s witness Mr. Lo and Mr. Clement Wong (“Clement”), the modular and fibreglass planters were delivered and installed onto the site in early October 2003.  The Plaintiff commenced the planting of shrubs and flowering plants into the fibreglass planters on 12 October 2003.  On 23 October 2003, one set of the modular planters collapsed (“the 1^st collapsed modular”), the Plaintiff claimed it was due to serious defects in the frame support work.  The Plaintiff produced a letter from Kumagai, the main contractor of the site, dated 24 October 2003 attributing the collapse to the substandard supporting frame of the modular planters and requested the Plaintiff to supply the drawing and layout plan of the frame.

9.  Upon the request of the Plaintiff, the Defendant performed remedial work on the 1^st collapsed modular in October 2003.  Further complaints from the site architect Wong & Ouyang on 6 January 2004 followed alleging serious defects in the framework supplied by the Defendant, the fibreglass and painting of all the planters and the modulars.  Hairline cracks were allegedly found in all the fibreglass and modular planters and the paint on the planters were found to be peeling off.

10.  Upon receipt of the letter of complaint from the site architect Wong & Ouyang, the Plaintiff met with Mr. Wong at the Plaintiff’s office on 8 January 2004 requesting the Defendant to resolve the matter to the satisfaction of Kumagai and the site architect.  The Plaintiff asked the Defendant to extend an additional warranty of 2 years on the fibreglass and modular planters and that the Defendant should supply maintenance and remedial works to the Plaintiff free of charge for the same period.  The Plaintiff claimed Mr. Wong had agreed and accepted the Plaintiff’s proposal and executed a warranty in writing in the presence of two witnesses.  

11.  On or about 18 May 2004, the Plaintiff received another fax from Kumagai enclosing the site instruction prepared by Wong & Ouyang notifying the Plaintiff that another modular planter had collapsed with the supporting metal framework exposed and deformed with rust (“the 2^nd collapsed modular”).  The Plaintiff was further told to replace all fibreglass planters.

12.  The Plaintiff then notified the Defendant to conduct rectification and remedial works on the fibreglass and modular planters.  However, the Defendant refused to comply with the Plaintiff’s demand.  Consequently, the Plaintiff had no choice but to engage other contractors to rectify the defective planters. 

The Defence’s case

13.  The Defendant (“Mr. Wong”) denied it was his responsibility to design the fibreglass planters or to give an opinion on the Plaintiff’s design of the fibreglass planters.  He claimed he had produced the planters according to the instructions, information and plans supplied by the Plaintiff.

14.  Mr. Wong admitted there was a meeting held at the Plaintiff’s office on or about 20 to 23 March 2003 between Mr. Lo and himself.  It was at that meeting that the Plaintiff supplied the Defendant with the information and specifications on the fibreglass and modular planters with the plans.  The Defendant submitted a quotation based on the plans and specifications given to him on 31 March 2003.  However, he denied he was ever given the landscape architects’ (Belt Collins) drawings of the modular planters (page 386 and page 417 to 419 of bundle C).

15.  Mr. Wong claimed that the defects and damages to the fibreglass planters and the 2 sets of modular planters were due to poor design, misuse by the Plaintiff and damage done by others.  He claimed he had warned the Plaintiff at an early stage that the 2 sets of modulars could not withstand the weight of normal soil and water but he was assured by the Plaintiff that only peat moss would be used in the planters.  The Defendant further claimed that his business was to sell and supply horticultural planters from his catalogue.  Though he would supply made-to-order fibreglass planters, a sample of the fibreglass used on the planters would be given to the customer for approval before production.  Upon acceptance of the sample by the customer, he would place the order with his manufacturer in China.  The same procedure was adopted in the Plaintiff’s case.  The Plaintiff had stipulated the fibreglass planters should be made according to the pattern designed with specified dimensions and it had accepted and approved the use of the fibreglass sample on the planters, which was used in all other fibreglass products of the Defendant including those previously supplied to the Plaintiff.  Mr. Wong claimed that the Plaintiff did not ask for any warranty or guaranty on the products from him under the contract.  The contract price of HK$210,000 included the making of the mould for the exterior pattern on the fibreglass planters and the production of the fibreglass planters, troughs and modular planters, but did not include delivery or transfer of the planters from mainland China to Hong Kong or the painting of the exterior surface of the planters which would be taken up by the Plaintiff.

16.  Mr. Wong further claimed that his fibreglass planters are normally used for different purposes, e.g. as containers of pot plants or for plants with soil directly placed into them.  He claimed he would not give any warranty to his customers because he could not control the customer’s usages of the fibreglass planters.  Customers who purchased his products should know their own requirements and decide for themselves whether his products would fit the customers’ individual needs.

17.  Mr. Wong further claimed that after the initial meeting and his quotation on 31 March 2003, the Plaintiff altered the drawings many times.  He exhibited the Plaintiff’s drawings dated 5 June 2003 (p.3 – 19 of bundle C) and finalized drawings with confirmed patterns and dimensions of the planters on 4 July 2003. 

18.  Mr. Wong further claimed that after he was shown the Plaintiff’s drawings of the fibreglass planters, he had warned Mr. Lo of the design problem in the modular planters.  In his opinion, because of the elevation of the modular planters C, D and E to a height of 650 mm supported by only thin fibreglass footer boards, the planters would not be able to withstand the weight of the soil and the tree.  But Mr. Lo told him that the design plans were drafted by the architect who had made calculations.  He was also told the planters would only hold small amount of peat moss for the growing of small plants and flowers and there should be no problems.  He believed the Plaintiff with over 10 years of experience in the horticulture and gardening business specializing in large-scale landscape projects should possess the expertise and know-how.  He also believed the Plaintiff knew the requirements and the usages of the planters and accepted Mr. Lo’s assurance to him.

19.  Mr. Wong claimed that before the Plaintiff took delivery from the manufacturer in China of the planters ordered, Mr. Lo attended the factory in China with two other persons and inspected the fibreglass planters under production at the time and none of them raised any queries on the materials used or questioned the quality and the production process of the fibreglass planters.  Between the months of July and September 2003, the Plaintiff made its own arrangements for the delivery of the fibreglass planters to the Bellagio in Hong Kong from China.

20.  Mr. Wong denied he was ever shown or given plans and drawings prepared by the landscape architect Belt Collins and he was not aware of any requirement of ‘steel anchor reinforcements’ for the planters.  Neither was he told the modular planters should have steel frames for support.  In or about mid October 2003 he was told one set of the modular planters had collapsed, and the Plaintiff asked him if he could fix the problem.  He attended the Bellagio site and to his surprise, the fibreglass modular planters were filled with soil and trees of over 10 ft. high, contrary to what he was told by Mr. Lo.  He then told Mr. Lo the planters had to be supported by a metal frame because of the weight of the soil and trees.  He claimed the Plaintiff faxed to him on 25 October 2003 a sketch plan of the metal frame, which was not originally intended in the contract.  He was asked to construct the metal frame.

21.  He claimed that at the time, the Plaintiff had failed to pay him the balance of the contract sum in the sum of HK$100,000, when he did not respond to the Plaintiff’s request to construct the metal frame he was not paid the outstanding sum.  Under the circumstances, Mr. Wong said he had no choice but to accede to Mr. Lo’s request and agreed to construct the metal frame using L-shaped iron bars for the collapsed modular planters.  On top of the metal frame, he placed a wooden plank beneath the fibreglass planters to provide support to the modular planters.  The work was completed at the end of November 2003; he was not paid any extra money for the metal frame construction.

22.  In early April 2004, he went to the Plaintiff and demanded payment of the outstanding contract sum telling the Plaintiff he had financial difficulties.  On 3 April 2004, he met with Clement, Miss Lee and two other staff of the Plaintiff, they asked Mr. Wong to supply further metal frames to the collapsed planters without any additional payments and to extend the maintenance of the fibreglass planters for 2 years or the Defendant would not be paid the balance of the contract sum.  The Plaintiff produced a maintenance agreement and demanded Mr. Wong should sign on the agreement.  Mr. Wong claimed he had no choice but to sign on the maintenance agreement because he wanted to get the outstanding payment.  He claimed he noticed the date on the agreement was 8 January 2004 and had asked Clement about it, Clement told him it was to assure the developer.  Upon signing the document, the Plaintiff gave to Mr. Wong a cheque of HK$20,000.00 as part of the outstanding contract sum.

23.  In mid April 2004, Mr. Wong purchased wooden planks, L-shape iron and fibre plastic for the construction of a metal frame for the 2^nd set of modular planters.  As on the first occasion in November 2003, he consulted Mr. Lo on the remedial work and Mr. Lo agreed to his method of remedial measures on both occasions.  On this occasion in April 2004, the Plaintiff gave Mr. Wong a cheque in the sum of HK$30,000 which Mr. Wong accepted as part payment of the outstanding contract sum.  Mr. Wong further claimed the Plaintiff’s staff was present and supervised the work as on the first occasion with the 1^st set of modular planters when he added a metal frame to the 2^nd set of modular planters. 

24.  In early May 2004, the Plaintiff told Mr. Wong there was a collapse of a combination planter.  He was asked to remedy the situation by supplying a metal frame to the planter that had collapsed.  As there was still an outstanding sum of HK$50,000 under the contract to the Defendant, he asked Mr. Lo to pay him HK$20,000 for construction materials to perform the remedial work but the request was rejected.  He therefore declined the Plaintiff’s request to perform the remedial work on this occasion.

25.  Mr. Wong claimed that he did not know initially the Plaintiff had a main contractor, he had later learned from his solicitor that on 27 October 2003 the Plaintiff had submitted the draft diagrams of the supporting framework to Kumagai who was the main contractor of the Bellagio site.  He further learned from his solicitor that the Plaintiff had submitted on 1 November 2003 and 28 May 2004 amended draft diagrams to Kumagai.  Mr. Wong claimed that these indicated when he was carrying out the 1^st and 2^nd remedial works, the Plaintiff did not submit draft drawings of the metal frame and work procedure to Kumagai before he performed the remedial works.  He claimed that if the remedial works failed to meet the standards of Kumagai because the Plaintiff failed to consult the architect and Kumagai before execution of the remedial works, the Defendant should not be liable.  Furthermore, he had in no time been informed of the requirement of the main contractor or shown any drawings of the architect or been referred to the stipulations of the landscape architect and Kumagai on the flower and modular planters.

26.  Mr. Wong denied the cracks in the fibreglass planters were due to the quality of the fibreglass used.  He attributed the cracks to the design and the planters being overloaded with soil and plants.  He claimed the planters could have been damaged during transfer from the factory in China to Bellagio in Hong Kong.  As to the claim of oil stains on the fibreglass planters, Mr. Wong claimed they were not due to the quality of the fibreglass because the fibreglass material used had been approved by the Plaintiff.  He believed they were remnants of wax left behind during the manufacturing process that the Plaintiff had failed to remove when the planters were painted.

27.  Mr. Wong claimed that in April 2004, Mr. Lo had asked him to fix the paint on the flower planters that had peeled off, he was promised the costs of paint and labour.  However, he was only paid 50% of the costs of labour and paint in the sum of HK$1,850, the Plaintiff failed to reimbursed Mr. Wong the balance of the costs.  The Defendant counterclaims against the Plaintiff for the balance of the contract price of HK$50,000.00 and the balance of painting work and labour done in April 2004 in the sum of HK$1,850.

The Issues

28.  The issues in this action are:-

(i)	The terms of the contract between the Plaintiff and the Defendant; and
(ii)	Whether the two warranties dated 8 January 2003 and 23 March 2003 are binding on the Defendant.

Findings

The terms of the contract between the Plaintiff and the Defendant

29.  It is the Plaintiff’s case that the Plaintiff entered into contract No. 900 (“the main contract”) with the main contractor of the Bellagio to carry out landscape work that included the planting of shrubs, flowers and trees at the site.  The Plaintiff at the trial did not disclose the main contract between Kumagai and the Plaintiff.  Mr. Wong claimed he had no idea the Plaintiff had a main contractor, which supervised the landscaping work at the site.  Unlike most building contracts, where subcontractors are given a copy of the part of the main contract work subcontracted to them attached to the sub-contract or references made in the sub-contract to the part of the main contract which the sub-contractor was responsible for and had to comply with; in the present case, the main contract for landscape work at the Bellagio was not disclosed to the Defendant who was a supplier of fibreglass planters.  

30.  It is the Plaintiff’s pleaded case that the contract between the Plaintiff and the Defendant was partly oral and partly in writing.  The oral part was made at a meeting or meetings between 20 and 23 March 2003 the Plaintiff’s Mr. Lo and Clement had with the Defendant Mr. Wong.  On 31 March 2003, the Defendant faxed to Mr. Lo a fibreglass planter supply quotation (page 1 of bundle C).  It is not disputed the contract price was based on the unit price quoted in the Defendant’s quotation of 31 March 2003.  The Plaintiff claimed that at the meeting(s) between 20 and 23 March 2003, Mr. Lo had personally informed Mr. Wong the fibreglass planters would be used for the growing of trees, plants, shrubs and flowers at the Bellagio and that they should be durable, of good workmanship and reasonably fit the particular purpose for which they were required.  And Mr. Wong had assured him that “he knew how to make them”.  Mr. Lo also claimed that prior to the meetings between 20 and 23 March 2003, the Plaintiff had sent over the Wong and Ouyang drawings of the planters and modular planters to several other contractors inviting their quotations and the Defendant was one of the contractors invited to give a quote.  The Plaintiff further claimed that upon the Plaintiff’s agreeing to supply the fibreglass planters and modular planters from the Defendant, Clement had consulted Mr. Wong and produced a set of shop drawings of the rectangular, circular and modular planters incorporating the comments of the architect Wong and Ouyang.  Furthermore, the Plaintiff claimed the Defendant was in complete charge of the production process of the fibreglass and modular planters from beginning to end without any intervention from the Plaintiff, these included decisions such as the materials used and the structural support for reinforcement of the planters.

31.  This is contrary to Mr. Wong’s evidence.  Mr. Wong claimed that even though the Plaintiff had been ordering fibreglass planters from the Defendant’s catalogue since 2000, this was the first time the Plaintiff purchased fibreglass planters to be made according to dimensions and drawings supplied.  The Defendant claimed the contract between the parties was to supply the same fibreglass material used in the Defendant’s catalogue fibreglass products and samples had been duly approved by the Plaintiff with no maintenance or warranty period specified.  Mr. Wong further denied that he had at any stage before the quotation been given a set of drawings from the site architect Wong & Ouyang or the landscape architect Belt Collins such as those on pages 386 and 417 to 419 of bundle C.  Mr. Wong admitted he had only received shop drawings from the Plaintiff on pages 5 to 19 together with a covering fax at page 3 (translation on page 4 of bundle C).   The page 3 covering fax was sent by Clement to Mr. Wong, it read:

“	Fiberglass flowerpots project at Bellagio Shem Tseng
	(1)	Please hand the 2 pieces of light yellow fibreglass board at 60 mm thick (300 x 300) as soonest possible
	(2)	Attached the latest diagram please arrange and to proceed the project (work done on or before 20/7)
		Quantity	rectangle	8 pieces
			round	16 pieces
			combination	2 sets
		*Arrangement has been made for issuing a cheque of HK$30,000 for down payment.”

32.  This fax message indicated that the contract between the parties was concluded when the Plaintiff informed the Defendant to proceed with the project on the date of the fax, 5 June 2003.  It was accompanied with drawings of the fibreglass planters and details of the surface design on the planters.  This fax message also set out the type and the thickness of the fibreglass to be used on the planters.  It showed clearly the Plaintiff had given specific instructions on the fibreglass material to be used on the planters namely “light yellow fibreglass board of 60 mm thick”.  The measurements were specified in the enclosed drawings at pages 5 to 19 of bundle C.  However, there was no reference either in the page 3 fax or in the enclosed drawings for the requirement of ‘steel anchor reinforcements’ for the planters.  These documents giving specific instructions do not support the Plaintiff’s claim that the Defendant was left in complete charge of the design and materials used on the planters.

33.  A further document relied on by the Plaintiff is the Defendant’s invoice No. 18286 to the Plaintiff on 21 June 2003.  The invoice stated the contract price of the supply of fibreglass planters was HK$210,000 and the payment of deposit was HK$60,000.  The invoice further stated the contract was for the supply of 2 sets of modular, 8 rectangular flower troughs and 16 circular planters.

34.  The document therefore indicated that on 21 June 2003 the parties had finally concluded the agreement by the payment of deposit of HK$60,000 for the supply of 2 sets of modular, 8 rectangular flower troughs and 16 circular flower planters.  This together with the page 3 fax from the Plaintiff to the Defendant enclosing the pages 5 to 19 drawings of the planters and details on the surface of the planters formed the terms of the contract.  From the evidence of the markings on the fax on pages 5 to 19 “5 June 2003 17:15 from Tung Kee Garden Horticulture Ltd.” etc. it is quite clear the Plaintiff did fax over to the Defendant on 5 June 2003 these drawings which were drawn by Clement.  The page 3 fax covering message also indicated that Clement have supplied earlier drawings to the Defendant because under item 2 of the fax he referred to “the latest diagram please arrange and proceed the project”.  As to whether the drawings by Belt Collins (pages 417 to 419) had been delivered or faxed over to the Defendant is not evident because pages 417 to 419 did not bear any similar fax markings of date and time, nor was there a covering fax message to these drawings addressed to the Defendant similar to page 3.  Pages 417 to 419 contained translations of certain words from English into Chinese; these are absent on page 386.  On pages 384 is a fax transmission message from Kumagai to the Plaintiff.  On this fax of 15 October 2002, there were references to contract “C900-GRC Planter Box” and the remarks “please proceed shop drawing submission accordingly”, further references were made to the documents enclosed with this fax.  These documents (page 384 to 419 of bundle C) were only disclosed by the Plaintiff after the third day of the trial.  By producing the quotations from “Ming Xing Po Li Gang Gong Si” of 29 October 2002, the Plaintiff presumably intended to show it had sent to Ming Xing and presumably other contractors the Plaintiff’s requirements based on the same drawings and specifications.  However, there is a difference of 5 months between Ming Xing’s quotation and the Defendant’s on 31 March 2003.  Furthermore, the contract with the Defendant was to supply fibreglass planters of 60 mm thick as opposed to Ming Xing’s quotation for 4 mm thick fibreglass planters with steel reinforcement. They are in fact very different products.  The Defendant’s planter footer boards as shown in Clement’s diagram on page 5 of bundle C would be constructed with 60 mm fibreglass, while Ming Xing’s planters would be made of 4 mm fibreglass planter with steel reinforcement.  Pursuant to Kumagai’s fax of 15 October 2002, the Plaintiff obtained Ming Xing’s 3 dimensional drawings of 2 November 2002, received long before the Defendant was invited to give his quote.  The p.5 drawing from Clement clearly indicated the Plaintiff had rejected Ming Xing’s design and replaced it with the Plaintiff’s own design using only fibreglass without metal inserts in the footer boards.

35.  Page 396 is a quotation dated 19 March 2003 from another fibreglass company Ching Ngai Fibre Glass Ltd. to the Plaintiff’s Mr. Clement Wong using fibreglass of 6 mm thick.   On this document are hand writings comparing Ching Ngai’s quotation on the 3 different types of planters and the quotations of another contractor.  Page 398 is a quotation from yet another contractor Express Glass Fibre Industrial Co. (EGF) dated 31 March 2003.  Page 400 is a quotation dated 10 April 2003 from Ming Xing for 26 rectangular fibreglass planters at HK$1,300.00 each.

36.  The newly disclosed documents indicated that long before the Defendant’s quotation of 31 March 2003, the Plaintiff had been shopping around and soliciting quotations from a number of contractors.  The fact that the Plaintiff obtained a further quotation from Ming Xing in 10 April 2003 on the rectangular planters showed the Plaintiff and the Defendant’s contract could not have concluded at the meetings between 20 and 23 March 2003.  Furthermore, there were further drawings on pages 24 to 44 dated 4 July 2003 prepared by Clement which were said to be the final set of drawings.  These were also said to have the approval of the architect and, they were the shop drawings that the Defendant based the production of the planters on.  It is clear, therefore, the Plaintiff had also been comparing the designs and materials used by different contractors before ordering the planters from the Defendant and the production process of the Defendant could not have commenced before 4 July 2003.

37.  There were no contract terms in writing between the parties other than the 31 March 2003 quotation and the Defendant’s invoice No. 18686 (pages 1 and 20 of bundle C).  By the time the Plaintiff faxed over to the Defendant the 4 July 2003 final drawings, the Plaintiff must have approved the 60 mm fibreglass samples; otherwise, the Plaintiff would have asked for further fibreglass samples to be supplied. 

38.  According to the Defendant, Mr. Lo brought 2 men to the Defendant’s manufacturer in China to inspect the fibreglass planters during production.  They were apparently satisfied with the materials and the manufacturing process.  Furthermore, the Plaintiff did not dispute that the Plaintiff was responsible for arranging the transfer of the fibreglass planters from China to the Bellagio and for the painting work after arrival.

39.  Based on the evidence adduced, I am satisfied the Plaintiff had begun taking delivery since the end of July in a number of instalments which completed in the beginning of September 2003.  On 11 August 2003, Mr. Wong was paid a further HK$50,000.00 of the contract price, the second payment of the contract (page 47 of the bundle). 

40.  At the hearing, Mr. Lo claimed the Defendant had transferred the planters from the factory to Hong Kong to a certain location before the Plaintiff instructed his own transport contractor to transfer the planters to various locations at the site.  He claimed he was merely helping the Defendant to make the transfer.  However, he was not able to name the location the Defendant had delivered to and he agreed the transfer was not an agreed term of the contract.  Mr. Lo admitted the transportation cost from China to Hong Kong was not included in the contract and the Plaintiff had subsequently agreed to be responsible for the transfer of the planters to the site.  He also agreed that the planters were transported to Hong Kong on a number of occasions.  When questioned whether they were damaged during transportation, he admitted the planters’ surfaces might have been a little scratched but as they were not yet painted, the paint would have covered them up.  He further admitted that the Defendant had followed the instructions and drawings supplied to him and there were no complaints at the time of delivery.  Furthermore, there were also no complaints about the materials used at the time.  Mr. Lo admitted he had visited the Defendant’s manufacturer in China with a representative of the architect and had witnessed the making of the mould of the planters.  He was told by the contractor who performed the remedial works that the cause of oil stains appearing on the surface of the planters was due to the inferior quality of the fibreglass cloth.  However, no expert evidence had been adduced on this or any other aspects of the Defendant’s planters’ quality or durability.  Mr. Lo’s evidence on the alleged opinion of the contractor is hearsay and not supported by an expert report.  It should not be given any weight.

41.  Based on the evidence of the Plaintiff’s two witnesses, the Plaintiff had little idea of how fibreglass planters were manufactured before contracting with the Defendant.  Mr. Lo confessed he was not told and had no idea that metal support had to be installed in the fibreglass planters for reinforcement when the contract was entered into between the Plaintiff and the Defendant.

42.  On the other hand, Clement claimed he faxed over to all contractors the pages 416 to 419 plans and drawings from the architect before quotations were obtained.  However, when cross-examined on the dates and particulars of the drawings and plans he faxed over to the Defendant, he admitted he was not sure. 

43.  I find the evidence of Clement and Mr. Lo to be inconsistent.  Mr. Lo admitted to have left all the office details to Clement including the receipt of plans from the architect and Kumagai, liaising with the architect and the contractors, sending over drawings and specifications for quotations etc.  Clement was left on his own to interpret the architect’s drawings, clarify the drawings with Kumagai and drafting the shop drawings for the subcontractors.  As a business graduate with no previous training in horticultural or landscape work, he was left to produce these shop drawings based on his own understanding of the landscape architect’s drawings. 

44.  It is not disputed that no shop drawings had been sent by either the Defendant or the Plaintiff to the landscape architect for approval before production; if it were done, the landscape architect would have noticed the elevated fibreglass planters had no steel reinforcement support.  In spite of clear specifications on the landscape architect’s sketch plans that all planters should be made of fibreglass with steel anchors and that the subcontractor should provide shop drawings for the landscape architect’s approval, Clement admitted shop drawings were not sent to the landscape architect for approval, the Defendant’s planters had no steel anchors installed and even Mr. Lo had no idea steel anchors were the landscape architect’s requirements in spite of the pages 417 – 419 drawings. 

45.  Further confusion appeared in the Plaintiff’s evidence in that Clement claimed he had received architect plans at different times, which he claimed, he had faxed to different contractors inviting quotations.  The evidence also showed the Plaintiff was obtaining quotes from different contractors as late as April 2003.  Compared to the quotations from Ming Xing, Ching Ngai and EFG, the Defendant’s quotation appeared to be more reasonably priced.  He was only approached after Ching Ngai Fibre Glass Ltd. submitted a quotation on 19 March 2003 (page 396 of bundle C) for Mr. Wong met the Plaintiff’s Mr. Lo on 20 to 23 March 2003 in respect of the Bellagio project.

46.  At cross examination, Clement claimed he faxed over the sketches and plans to the Defendant before the quotation of 31 March 2003, he changed his evidence later and said the drawings and sketches at pages 417 to 419 were given to Mr. Wong at the meetings on the 20 to 23 March 2003.  Upon being further questioned, he admitted the pages 417 to 419 drawings were sent to the contractors on separate occasions because he himself received them from the architect on different dates.  His evidence was unsatisfactory and is unsafe to rely on. 

47.  Mr. Wong’s quotation of 31 March 2003 made no reference to any steel reinforcements to the planters.  The fax from Clement to Mr. Wong of 5 June 2003 (page 3) is clear evidence that the Plaintiff had by then decided to engage the Defendant as its supplier of fibreglass planters for the Bellagio.  On this fax, Clement asked the Defendant for 2 light yellow fibreglass sample boards of 60 mm thick for approval and requested the Defendant to start the manufacturing work as soon as possible based on the latest drawings faxed on the same day to the Defendant.  There was no reference in this fax or any other document that the Plaintiff requested the Defendant to supply metal reinforcement inside the planters.  He was instructed to supply planters based on Clements drawings and he was not asked to supply his own drawings for the architect’s approval.

48.  The Plaintiff relied on a few Chinese characters on the drawings of the architect (pages 417 – 419) translating the architect’s specification for steel anchors for the fibreglass planters.  If the Plaintiff had ignored the landscape architect’s specific remarks on the same drawing requesting the Plaintiff to submit shop drawings for approval prior to production of the planters, the ‘steel anchors’ requirement may well have also been ignored.  Given the unsatisfactory nature of Clement’s evidence, I am not satisfied on a balance of probabilities that the Plaintiff did forward or hand over the drawings on pages 417 to 419 in addition to Clement’s own drawings (pages 5-19) to Mr. Wong or it had explained the architect’s requirement of steel anchors to the Defendant. 

49.  Under the contract, the Defendant’s fibreglass planters were 60 mm thick as opposed to the other contractors’ fibreglass of 4 mm or 6 mm with support.  The planters from the Defendant are clearly different products from those of the other contractors. The Plaintiff might have considered the Defendant’s 60 mm thick fibreglass planters would not require metal reinforcements and therefore decided to order from the Defendant fibreglass planters, which had no metal reinforcements.  The Plaintiff, having approved the fibreglass samples, inspected the manufacturing process in China with the architect at the Defendant’s supplier in mainland China, took delivery of the finished products from the manufacturer in mainland China and transferred the planters to the Bellagio site in Hong Kong, was obviously satisfied with the finished products when it accepted the planters and took delivery over a period of 3 months between July and September 2003.  At the relevant time, there were no queries or demand for metal reinforcement for the planters.  Therefore, the Plaintiff must have accepted the planters for it had ample opportunity to examine them after taking delivery as defined under S. 37 of the Sale of Goods Ordinance Cap. 26.

50.  It was only after the first set of modular planters had collapsed that the Plaintiff approached the Defendant to rectify the collapsed planter.  The Plaintiff had obviously accepted the advice of the Defendant on the remedial measures because the Plaintiff then asked Mr. Wong to submit drawings on the frames to be placed underneath the collapsed planter at request of the landscape architect.  It is apparent from the documents produced that Kumagai had made the Plaintiff responsible for the remedial works, it was only at this stage that the Plaintiff produced shop drawings for the metal framework in October 2003 after consulting the Defendant for the architect’s approval.  There was no evidence the requirements of Kumagai and the architect were communicated to the Defendant.  If Kumagai and the architect had supervised the Defendant’s remedial works, there probably would not be rust stains seeping onto the floor tiles months later.  It is clear the Plaintiff had no idea how to make the planters rust-proof and collapse-proof at the time.  The Defendant on the other hand was only a planter supplier and lacked the expertise the main contract had expected of the Plaintiff.

51.  I accept the evidence of Mr. Wong that in October 2003 he had only agreed to construct the metal framework for the first set of modular planters that had collapsed in mid October 2003 because the Plaintiff threatened not to pay him the balance of the contract price of $100,000 if he refused to construct the metal framework for the collapsed modular planters.

The Two Warranties

52.  It is apparent the Plaintiff was under pressure from the main contractor Kumagai to conduct the remedial works under the landscape contract C900.  The Plaintiff turned to the Defendant and demanded the same from him including the warranty in the same terms that the Plaintiff had extended to Kumagai.  There is evidence that Kumagai requested the remedial work in the 8 January 2004 fax.  According to the evidence of Mr. Lo and Clement, on the same day in January 2004, they held a meeting with the main contractor when the Plaintiff offered the main contractor an extension of the warranty from 8 January 2004 to 23 July 2006 for the maintenance of the fibreglass planters.  There was no evidence that Mr. Wong also attended the same meeting or attended the Plaintiff’s office shortly after that day.  Mr. Wong’s evidence was he attended the Plaintiff’s office on 3 April 2004 because the Defendant was facing financial difficulties and requested the Plaintiff to pay him the balance of the contract price.  It was at this meeting the Defendant was told to perform the remedial works on the 2^nd set of modular planters that had collapsed at no additional charge, in return he would receive a payment of $20,000 as part payment of the outstanding contract price.  Mr. Wong produced a receipt No. 19856 in the sum of $20,000 dated 3 April 2004 in support of his evidence.  On the same occasion, Clement insisted that he should sign on the first warranty and Mr. Wong claimed he noticed that Clement had already signed the document and dated it 8 January 2004.

53.    I accept the evidence of Mr. Wong because he was able to support his evidence with the receipt of 3 April 2004. There is a ring of truth in his claim that he was under pressure because the Plaintiff refused to pay him the balance of the contract price unless he agreed to do the remedial works and sign a warranty of 2 years up to 23 July 2006.  The contract between him and the Plaintiff did not even specify a warranty period of 6 months.  A warranty signed under such circumstances is not binding for failure of consideration.

54.  As to the second warranty, Mr. Wong was unclear as to when or if he had signed this document (page 77 of bundle C).  This warranty guaranteed an extra 1-year from 23 July 2005 the peeling paintwork on the surface of the fibreglass planters.

55.  Based on the evidence produced, the Defendant’s contract with the Plaintiff did not include any paintwork on the fibreglass planters.  Under the circumstances, the Defendant should not be liable for the peeling paint and the damage to the paint on the surface of the fibreglass planters if it was not the Defendant’s responsibility to supply the painting work in the first place.  Consequently, the Defendant should not be liable for the maintenance of the paintwork on the planters.

56.  As to the first warranty, the Defendant was under pressure to sign it because he was told he would be paid the balance of the contract price if he agreed to construct the iron framework for the reinforcement of the collapsed planters.  He was paid $20,000 on 3 April 2004 and a further sum of $30,000 on 13 April 2004, which he treated as part payments of the outstanding contract price.  The fact that he did perform remedial works on these occasions and refused to take up further remedial works was clearly because he was told he would not be paid further sums.

57.  There was no explanation as to why the two warranties should expire on 23 July 2006.   The contract had no warranty specified and no prior agreement reached on any warranty period.   The Plaintiff failed to show the Defendant had made a contractual promise or a statement of fact which is promised to be true and in due course accepted (see p. 516 of Benjamin’s Sale of Goods 7^th ed.).  As there was no contractual promise at the time of contract, there could not be a warranty, least of all, one that should last for 3 years after delivery of the planters.

Conclusion

58.  Based on the evidence before me, I find the Plaintiff’s two witnesses to be inconsistent and unreliable, Mr. Wong of the Defendant on the other hand, I find to be a credible witness.  The Plaintiff had failed to show the Defendant was to supply fibreglass planters with metal reinforcements.  Mr. Lo confessed to have no idea that metal reinforcements had to be inserted during the manufacturing process at the time, neither did Clement who had no actual or site experience.  I am not persuaded that either of them had communicated the architect’s requirements on the drawings to the Defendant.  Instead, the Plaintiff supplied to the Defendant its own drawings and instruction based on which the Defendant produced the planters ordered.  From the documents produced by the Plaintiff on the subsequent remedial works by other contractors after the Defendant refused to take it up, it was clear the landscape architect and Kumagai had personally supervised each and every step of the remedial works.  This was done probably because the Plaintiff had shown a lack of expertise.  The metal frames were supplied by a contractor specializing in metal works, while the fibreglass work was done by Ming Xing which specialized in fibreglass articles and the paint used was supplied by a paint contractor using a special paint for fibreglass products.  These showed the work required special skills and expertise in different areas to ensure the complaints raised by Kumagai of the collapsed planters, peeling paint, rusty frames would not happen again.  The Plaintiff was clearly inexperience in the supply of elevated fibreglass planters and had ordered the planters from the Defendant who supplied 60 mm fibreglass planters with no metal support, which the Plaintiff accepted.  I am satisfied the Plaintiff took delivery of the planters knowing full well they had no built-in metal reinforcements.  The paintwork was not part of the contract between the parties therefore it was not the responsibility of the Defendant if the paint used by the Plaintiff had peeled off.  As to the rusting metal frames, it was not part of the contract that the Defendant should supply the metal frameworks, he was only asked to supply the metal frames after the collapses took place.  Furthermore, it was done under the supervision of the Plaintiff, if the metal frames became rusty and stained the floor tiles at the site it was due more to the Plaintiff’s lack of judgment and ignorance of the work involved rather than the sub-contractor’s faulty workmanship.

59.  Miss Cheung, Counsel for the Plaintiff, submitted the Plaintiff had relied on the Defendant’s skill and judgment in the production of the goods.  She cited the authority of Cammell Laird & Co. Ltd. v. Manganese Bronze and Brass Ltd. [1934] A.C. 402 where Lord Wright held:

“	What subsection (2) now means by ‘merchantable quality’ is that the goods in the form in which they were tendered were of no use for any purpose for which such goods would normally be used and hence were not saleable under that description.”

60.  The definition of ‘merchantable quality’ in the U.K. Supply of Goods (Implied Terms) Act 1973 is:

“

goods of any kind are of merchantable quality within the meaning of subsection (2) above if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect having regard to any description applied to them, the price (if relevant) and all the other relevant circumstances.”

The authors of Benjamin’s Sale of Goods 7^th ed. accepted the definition to have consolidated and stated the result of a body of case-law doctrine and advanced on it (p. 492 para. 11-039).

61.  In the Sale of Goods Ordinance Cap. 26, no similar definition has been adopted.  S. 16 (3) of the Ordinance provides:-

“

(3)

Where the seller sells goods in the course of a business and the buyer, expressly or by implication, makes known to the seller any particular purpose for which the goods are being bought, there is an implied condition that the goods supplied under the contract are reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied, except where the circumstances show that the buyer does not rely, or that it is unreasonable for him to rely, on the seller’s skill or judgment.”

62.  The Defendant in the present case had been selling standard fibreglass planters from catalogue for sometime.  The Plaintiff, on the other hand, is an established horticulture and landscape company, which was expected to possess the skill and judgement on the design and materials used on the planters.  I am not satisfied that the Plaintiff had relied on the skill and judgment of the Defendant under this contract when, in fact, all specifications and instructions on the planters had come from the Plaintiff.  Given the background and circumstances of this case, it is clear this is not a case where the buyer had relied on the skill and judgment of the seller.  For the above reasons, I dismiss the Plaintiff’s claim.

Counterclaim

63.  The Defendant claims against the Plaintiff for the balance of the contract price of $50,000 and the sum of $1,850 being the outstanding 50% of the costs of the painting work to the fibreglass planters undertaken by the Defendant which the Plaintiff had agreed to pay.

64.  As the contract between the Plaintiff and the Defendant did not include any painting work to the fibreglass planters, I accept the evidence of Mr. Wong that he agreed to take up the painting work at the request of the Plaintiff and the Plaintiff had agreed to pay the cost of the work.  The Defendant had successfully proved his case against the Plaintiff for the balance of the contract price and the balance of the cost of the paintwork.  I give judgment to the Defendant in the sum of $51,850.

65.  Interests – interests at half judgment rate from the date of counterclaim to date of judgment thereafter at judgment rate.

66.  Costs nisi to the Defendant to be borne by the Plaintiff to be taxed if not agreed with certificate for counsel.  The order will be made absolute should the parties failed to apply to be heard on costs within 14 days hereof.